8 min.

From the user onboarding improvement to the research of user behavior. Here are 5 hacks on how to reduce churn for your SaaS company.

Comprehending ways in which churn can be reduced is critical to the success of your SaaS company.

As a SaaS company grows, the number of the subscribers/users/customers who no longer trade with the company also, naturally, goes up. This corresponds to a drastic dip in the overall revenue too, which requires more and more signups from new customers and better initiatives aimed at replacing what you these companies are organically losing every month.

Retention Email Marketing: 7 Techniques to Reduce Churn Rate

According to the latest statistical data available, the average annual unit churn was 10 percent for SaaS businesses in 2016. In excess of two-thirds of SaaS organizations typically experience churn rates of at least five percent or more.

A net revenue churn that is calculated at greater than two percent per month is considered high. This is an indicator that the business may not be healthy, and it will translate to a serious damper on growth.

Simply put, growth decelerates, becomes sluggish or worse so, you’re losing far more customers than you are gaining day after day. That’s why you are required to be concurrently fuelling your growth engine, while keeping track of your churn and your other startup metrics.

Wondering how to do that? Don’t worry we’ve got your back!

Below are 5 hacks on how to reduce churn for your SaaS company:

1) Improve user onboarding

When using a service for the first time, most users have absolutely no idea what to expect. An exceptional onboarding process guides them through it, demonstrating the advantages that follow along, and teaching them what to anticipate along the way.

Website tours shouldn’t feel like a lot of work, and intelligent defaults are a great way to balance the choice vs. ease ratio—provide users with the freedom to personalize their plan while conserving their ability to glide quickly swiftly through the process.

If users log in to your website once or twice and then start to collapse, naturally, you’d want to reach out to them in the days following their sign up to bring them back.

Ideally, you would do this through email marketing or, if users have opted in, push notifications. Successful onboarding emails can not only reduce churn, but also increase customer lifetime value and turn new users into loyal, paying customers.

You can get more productive at bringing users back if you target them with messages that are pertinent to them. Customization goes a long way in reducing churn. The chances of someone coming back to your SaaS service go considerably up with some useful information specific to their lifestyle.

Never stop optimizing your onboarding process. Afterall, even those with “good” conversions could be better, and small improvements add up over time. Always place prime focus on creating value for your customers!

2) Exercise targeted marketing

More often than not, you may know about how your product can be brought to use better than any user. You could have the most dynamic product with hundreds of features that apply to a ton of different user groups. However, all of that gets rendered useless if you’re losing out on customers more frequently than you’re gaining them. Targeted marketing, backed by a strong content strategy, is an excellent way of doing just that!

You can create guides for customers on how to utilize your service or create content specific to the biggest problems for those industries positioning your service as a solution. Having content available for users from those groups is important for a successful onboarding and to hook them on your SaaS solution long term.

The right content strategy has a strong potential to generate a consistent stream of predictable revenue, if done right.

As the customer moves down the sales funnel, the search volume for the keyword goes down but the buy intent skyrockets. These are the bottom of the funnel (BOFu) keywords that you should be targeting.

Start by identifying the BOFu keywords that work best for your SaaS company. Next, create your landing page around these keywords and layer it with the middle of the funnel  (MOFu) content to improve your chances of being found by quality leads further. Lastly, pitch to high authority publications within the SaaS realm to build a strong backlink portfolio. By utilizing this technique, you can nearly bid farewell to all that unwanted churning!

3) Research user behavior

User behavior says much more about a user than his/her age, location, or other demographics ever can. Behavioral segmentation allows for making decisions that are more relevant to individual users. That’s why SaaS companies must move beyond segmentation based on traditional demographics to counter higher churn rates.

The analysis of customer behavior begins by analyzing the complete user journey in the form of events: right from the acquisition stage to the conversion, and finally the usage stage.

In the context of a SaaS solution, analysis helps identify what may have prompted the end of a session, and enable the inspection of questions such as: what proportion of users ended their session after coming across an error message, concluding a level, or spent an above-average amount of time on an onboarding task? Asking these questions opens up new doors to make informed decisions.

Once the analysis is complete, one can easily identify the behaviors that correspond directly to actions that users perform when they are about to unsubscribe or cancel altogether. That will further reveal ‘at-risk’ users quickly. Leverage what you learn to arbitrate with users who are at a high-risk and lower your churn rate.

Look for user behaviors that gesture toward customers facing difficulty and contemplate ways you can help them along. Don’t limit your solutions to customers who are at the peak of churning. Think of ways you can reward your loyal customers as well.

4) Improve retention through trigger-based emails

Once you have an idea of which actions generate value for your customers, trigger-based emails are a great high impact, low-effort way of encouraging those actions and thereby, reducing churn.

Through retention email marketing, companies can engage their customers and strengthen their relationship with the brand, offering added value and usefulness.

These emails are founded on specific user actions. For instance, if someone signed up for your service but never completed the setup process, a trigger-based email from your side can be sent their way offering one-on-one guidance through setup.

In a recent study, it was observed that follow-up trigger-based emails result in an average 54% increase in gathering customers compared to just sending one common message to all, and emails based on products a customer has viewed achieved a 3.4x lift in revenue compared to promotional mailings.

Use analytics to identify your power users. Which actions have they completed that customers who unsubscribe or less valuable customers haven’t? Collect this information and come up with what an “Activated” customer looks like for your SaaS business. Then, set up trigger-based email campaigns encouraging less active users to take steps toward activation.

You can also use tools that provide real-time customer interactions, so others can see what people are doing or buying on your website around the world and get even more interested in learning about your service.

5) Stay at the top of your game even outside your comfort zone

Your app and website lie well within your comfort zone, which is fine when it comes to turning the spotlight on you. However, if you really wish to stand out, get people to follow you on social media (quick tip: follow them first!)

It isn’t simply about how popular your app or website is with the audiences, and it surely isn’t about gaining followers on various social media channels just for the sake of doing so.

It has more to do with leveraging social media, that in turn, leverages other media to stay top of mind. For instance:

  • Subscribers on your Youtube channel will get emails when there’s activity on it
  • LinkedIn will send your followers emails for just about anything and everything
  • Slideshare will say, “XYZ posted on SlideShare today…”
  • Quora will send questions for you to answer or simply answers to questions, etc.

All of these “social” networks push messages as well as updates to the followers/subscribers through email marketing or relevant techniques.

So it’s more than just saying “I have these many followers on my Youtube channel”… it’s having yet another way to get in front of people.

Final Words

Churn is extremely critical to the progress of your SaaS company and mind you, reducing it is going to be a never-ending battle.

However, there are ample ways to reduce churn today (or possibly create negative churn). Choose what works best for you from the hacks mentioned above and you’ll be good to go.

The better you can study your users’ behavior and aggregate their data, the better control you’ll gain over your churn rate.

It’s a lot of work and worth every bit. Every change that you make to your re-engagement strategy and a user’s experience will mean another fraction of percentage trimmed down your churn rate.

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